Brokerage companies are scattered all over the world and have many differences in trading conditions, products and services. Some companies are regulated, others are not. Some have been around for decades, others are rather young. Certain brokers work as Market Makers and have fixed spreads, others provide STP or ECN accounts with direct market access and offer a much larger selection of underlying assets for trading. This site was created to help you find the best forex brokers for your specific needs and requirements. There are several sections and filters in the menu on the left. These can be used to create a custom list of entities with preferable parameters and characteristics. If you find a certain broker you are currently trading with or have used before, feel free to share your experience about it in the comments section meant for forex broker reviews.
The forex brokerage business has undergone a lot of evolution in the last decade. The global financial crisis of 2008 and the events that happened thereafter have reshaped the industry. At about the same time, new technologies came up and also contributed to the evolution of the forex market and forex brokerage business. It is important for traders to understand what forex brokerage is all about and how it will affect their trading ventures. Before we get to meet the best forex brokers for 2019, it is pertinent to identify the role that forex brokers play in a traders career and why it is important to go with a forex broker that can match your circumstances and aspirations.
Forex brokers have several roles to play in the market. These roles have also evolved over time, as traders demand a lot more from their trading providers. Forex companies now perform the following roles:
This is the core role of the forex broker. The forex market is a virtual market with no physical location. At the centre of forex market operations is the interbank market, where the big banks offer various currency pairs for sale. Professional and individual traders therefore do not have to proceed to a physical location to trade, but rather have to have a means of accessing the interbank market. They can only gain access to the interbank forex market using software known as platforms. These platforms are provided by the forex brokers. So without the brokers, nobody can get access to the forex interbank market to trade.
Access can be provided directly using the ECN/STP platforms (also known as direct market access platforms), or indirectly using the market maker platforms that route orders to the brokers dealing desk. Traders should as much as possible, try to understand the implications of getting direct access to the FX market on one hand, and getting indirect access on the other. The type of access granted will determine factors such as amount of capital to start with, as well as the trading styles and processes to be adopted.
This is gradually but surely becoming a very important element of the forex brokers functions. Research has shown that 90% of retail traders will lose 90% of their accounts in 90 days. This is a well-established market statistic. Majority of the losing traders (if not all) are traders who are uneducated about the market and who do not understand how to trade profitably. These will end falling by the wayside. No broker wants to spend money acquiring clients, only to have them quit the market after decimating their accounts in 90 days. With brokers realizing that such an arrangement is not good for business in the long run, many of them are now investing significantly into trader education. Videos, articles and webinars are the common means by which beginner traders are given an introduction into the forex market.
Once traders get established on the platforms using trader educational resources, their trading activities can be sustained via the provision of market research tools, analysis and news feeds. Many brokers have incorporated this into their offerings as well. For the trader, this is a good thing.
The criteria for choosing a forex broker have evolved over the years. While there are still some elements that are critical to the choice and which have remained constant over time, there are other parameters which have emerged and which will be considered below.
Spreads are the primary cost to the trader. Lower costs mean that the trader will have a chance to retain more profits, or at least reduce the losses that may be incurred. Competitive spreads are now a factor used in broker selection. It may not be immediately obvious how much savings on spreads can translate to, but high volume traders such as scalpers know that when up to 300 trades are placed in a month, then savings from reduced spreads can be substantial.
Leverage in forex is now a big deal. What started off in 2010 when leverage caps were introduced in the US by the Commodities and Futures Trading Commission (CFTC), has now been extended into the United Kingdom and Europe. Retail traders in the UK and EU have seen leverage caps reduced from as high as 1:500, to just 1:30 for major forex pairs. Minor pairs and CFDs have even tighter leverage limits. This has increased margin requirements significantly. However, some brokers outside these jurisdictions have continued to maintain the high leverages, thus attracting traders who were caught out by ESMAs decision. Some of the UK/EU brokers have also opened international divisions, where their international client accounts are being migrated to. So traders now have a choice of operating with the low leverage brokers, or the high leverage ones.
Regulation will continue to remain a key factor in broker selection. Regulation ensures that traders are protected and that the trading environment is transparent and secure. The brokers presented on this site are regulated in their respective areas of operation, which ensures that traders who open accounts with them are assured of safety of their funds.
A mention has earlier been made about direct and indirect access to the interbank market. As a trader, you need to know how each type of access will affect you. Market makers provide indirect access because they buy positions from the interbank market and resell them to their clients using a dealing desk. Market makers usually require smaller amounts of starting capital, provide fixed spreads, and tend to have more slippages and requotes. They provide a low barrier for market entry.
ECN brokers on the other hand, provide direct market access. They require large amounts as initial capital, provide variable spreads, but do not have slippages and requotes. However, they charge commissions on trades in addition to spreads. At the end of the day, the traders financial capacity will determine if a market maker or an ECN broker will be selected for the trading venture.
Trading resources are generally tools that are provided by a broker to enhance the trading experience and potentially improve a traders trading outcomes. More is not always better. In this case, it is about finding the broker that has the right mix of trading resources that cover analysis, news and market insight.
Customer support can now be offered using a variety of means that were not in existence 10 years ago. Social media channels such as Facebook and Twitter, as well as messaging apps such as Telegram can now serve as channels for receiving near-immediate responses from a brokers customer support desk. Choose a broker with a diversified customer support structure which deploys these new means of communication.
The list below features best forex brokers selected by us for 2019 year. This list has been prepared after due consideration of all the factors mentioned above. In this list, you will find many brokers that are offshore brokerages with high leverage, or offshore divisions of EU/UK brokerages that can provide high leverage trading platforms to their clients. Feel free to read our forex broker reviews and make an informed choice based on the contents of this article.
Forex trading imposes a high level of risks and is not suited for all traders and investors. As much as trading on foreign exchange markets may be potentialy profitable, it can also lead to significant losses. Ensure that you have enough trading experience, knowledge and full comprehension of potential risks involved. Most derivative contracts have high leverage and low margin requirements. Hence, rapid price movements may inflict serious financial damage or even devastate your entire trading account.